What agency heads are saying about spring listings coming up: Part two
What buyers and sellers can expect this spring in Wellington and the regions
In the capital, the city’s two big independent agencies are readying themselves for the spring selling season and preparing their vendors to have realistic expectations.
Wellington has had the sharpest decline but also the sharpest incline, explains Tommy’s Real Estate senior agent, Nicki Cruickshank. “What goes up has to come down but it’s made things more affordable. First home buyers who were having to pay $1.1 million or $1.2 million for a home can now pay under $1 million,” she says. First home buyers are not competing against investors, they have the field to themselves for now.
Speaking in early September, Nicki thought there would be more listings in the pipeline by then, but the new supply has been a bit slower than she thought. She doesn’t believe economist forecasts that the house price falls still have a ways to go.
“I think the bottom is near because there’s an increase of buyers coming back to the market,” she says. At the same time, some homeowners have been a bit scared off by daily headlines on house price falls.
Potentially, there could be a lack of supply soon, which will start pushing prices up, perhaps encouraging a few more people to sell, suggests the Tommy’s agent.
75 Hamilton Road, Hataitai, Wellington
Craig Lowe, Managing Director of Wellington agency, Lowe & Co says he’s seeing the normal flow of listings and appraisals he would expect to see at this time of year.
25 Standen Street, Karori, Wellington
“The amount of houses coming to the market almost doubles between winter and summer, there will be a significant lift over the next few months, and this year won’t be any different,” says Craig.
“The question is, how long will homes stay on the market for?” he asks. “We’re probably in for a summer of lots of houses hitting the market and days on market of up to 45 to 55 days,” he says.
The Lowe & Co director remembers when the market was very hot last year, and there were just 330 properties for sale across the whole city. At its peak, the Wellington market will have over 1000 listings. On September 5, there were 770 homes on the market in the city, and he’s expecting numbers to be over 1000 over spring summer unless the market changes.
As long as it’s priced right, it will sell, he says. “And you can ruin any sale with a misaligned price.”.
The REINZ indications are that prices have fallen anywhere from 15 to 19% off the peak of September/October 2021 and that’s a huge discount, says Craig. There’s no indication that they will drop more than that on a long term basis.
“If you have a good home, and have owned it for an average of seven years, you should be very happy,” says Craig.
His message to those trying to time the market as a buyer or a seller is, don’t bother. “Nobody knows what the future holds, you just can’t time the peak as a seller and you can’t time the bottom as a buyer unless you’re very lucky.”
More selling activity going on in the regions than the cities, says NZ Sotheby’s
Interest in the regions continues to be strong both for main homes and for holiday homes, according to NZ Sotheby’s International Realty’s (NZSIR), Managing Director Mark Harris. He reports that the regional markets are “coming back to life” especially in the second home market both with buyers in the upper end of the market, and vendors across the board.
“There’s no real sense of urgency to these sales as yet however, just more activity than in the (main) cities where home owners and investors appear to be holding on more as it’s more of a primary residence market,” he says.
“We have good (listing) pipelines in the Southern Lakes, Waiheke, Hawke’s Bay and Tauranga,” says Mark.
The NZSIR MD notes that there are some large development projects becoming available in the Southern Lakes which are adding to that pipeline. Built to a great quality they will be a welcome supply to the latent demand in the area.
Apt 28 Marina Terrace, 65-95 Lakeside Road, Wanaka
In Queenstown, Sotheby’s has cleared a whole lot of listings and it’s about to have a big refresh, adds the NZSIR head.
Christchurch market seeing signs of life last four weeks
In the garden city of Christchurch, Debi Pratt from Tall Poppy is bullish about what’s ahead for her real estate market after strong interest on a handful of listings in August.
“We’ve got good pipelines and good appraisals, we’re ahead last month on the same time last year and for September we’re tracking ahead as well,” says Debi. She’s transacted quite a lot of sales for people heading to retirement homes, while other vendors are upsizing and downsizing, she says. A number of listings are also properties owned by investors who don’t want to spend the money on older homes to comply with healthy homes standards.
“And if the right thing hits the market at the right time, it draws heaps of multiple offers,” says the franchise owner. Speaking in mid September, Debi says, “All of us had open homes in the last four weeks and had in excess of 20 groups through at times.”
“I think Christchurch still does represent really good value against places like Auckland, Wellington and Tauranga,” says the Tall Poppy business owner.
She believes price falls in Christchurch haven’t been “ a blanket thing,” the worst case scenario they’ve dropped by 10% and they would have risen by 25-30% in the hot 2020 and 2021 markets.
“I feel like we’ve bottomed out and are in nice, stable territory now. Provided we don’t have a big global crisis, it will be business as usual in a more normal market, says the franchise owner.
Generally Tall Poppy agents in Christchurch are pricing homes, with “enquiries over” a price. “The buyers just love it, we’re getting a lot more engagement with this than other methods of sale like auction,” says Debi.
67 Pine Avenue, New Brighton, Christchurch City
Buyers are still making their offers subject to sale in the city, she adds. And sellers are still finding that person is the best buyer as long as they’re realistic on the other end (of selling their own home). Days on market are around 48, compared with 23 days last year, and the Tall Poppy business owner is expecting this might rise to up to 60. This is partly because of old stock that came on in March and April with vendors still expecting prices that were being achieved in November and December 2021.
One trend the Tall Poppy agent is seeing is people who bought land to build on are now buying near new homes because building their own home has become too hard.
“They were intending to build but they can’t nail down fixed price contracts (with builders),” she explains.
Three regional markets with listings primed and ready to go
Popular regional cities which have benefited from the trend for big city residents to move there for a change of lifestyle, are gearing up for another busy selling season.
In Tauranga, Tremains Managing Director, Anton Jones says people still see the coastal city as a nice place to be and the flow of new buyers has continued from the larger cities.
39a Grace Road, Avenues, Tauranga
In August, listing numbers have crept up and appraisals are coming in, so the agency is getting ready any time from now for spring selling. Anton says he’s been quite happy with the flow of appraisals coming through.
In terms of seller expectations, the attitude is everyone has got to be realistic. He’s expecting prices to plateau out in the coming months. Prices have dropped around 15% to 20% from the prices reached in November/December in the Bay of Plenty area, says the Tremains MD
Supply last spring didn’t happen until quite late around November. December was a bit of a concern because everything ran out, there wasn’t a lot of stock, he says.
At the other axis of the Golden Triangle, Simon Lugton of Lugtons Real Estate based in Hamilton, says in the last quarter of 2021, listings were down then bounced back to make it a very strong November. This year, he expects the flow of new listings to be more traditional with October and November the strongest months and September still building.
12 Cabernet Close, Rototuna, Hamilton
Listing numbers have already been building in August up 36% after a subdued July, says Simon. His agents were doing a reasonable number of appraisals, though how many of them are in the imminent pipeline was yet to be seen.
Those selling are more likely genuine owner-occupiers trading up or down and taking job transfers, he says.
Simon’s tip to sellers is, as the days on market have lengthened into the early 40s, to give themselves enough time before Christmas to get a sale confirmed. November is a bit late to bring their home to the market, sellers should think about coming on at the end of September, early October if they want a sale, he advises.
After a triple whammy, Dunedin cautiously optimistic
Dunedin feels like it’s been through the quietest patch now, after having the triple whammy of prices cooling, constraints from the CCCFA on responsible lending, and winter, says independent brokerage owner, Joe Nidd, of Nidd Realty.
Vendors have taken a wait-and-see approach and property on the market wasn’t necessarily priced where it needed to be, so quite a lot of stock was sitting and open home numbers plummeted, says Joe.
But Nidd Realty and other local agencies have now seen a lift in open home numbers and some multiple offers are coming in on properties. At the same time, there have been fewer conditions on offers. Vendors, meanwhile, are starting to feel like they can’t wait forever and are deciding to move ahead and get the property sold, says Joe. Most people are buying and selling in the same market, he adds.
68 Botha Street, Tainui, Dunedin
People who are selling because they’re intending to buy something else, are getting on with it. The biggest hindrance is still finance, and that’s improving so there’s cautious optimism before this busy trading period, says the agency owner.
A lot of people are more comfortable about interest rates, he says: “They’re saying, ‘We can fix for two to three years and control our future,’” says Joe.
“At the same time, good levels of stock are primed and ready to go. Property has been selling, with not a lot coming on and buyers are ready to look at well-priced properties,” says Joe.
For those who choose to sell before they buy their next property, people are less concerned about being stranded, knowing that there’s enough coming on for them to find something, says the Nidd Realty owner.
In terms of prices, Joe thinks the market is due for a plateauing of price, as buyer sentiment is improving, supply is somewhat steady, and it’s unlikely there will be a glut of supply.
“What we’re seeing now is very little speculative buying and selling going on. People are buying out of a need, so this is the market behaving on its fundamentals.”
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